War Risk Clauses vs Hindrance Clauses: Same but Different?

Introduction

“War risks” have been the maritime “hot topic” in recent months due to the (repeated) closure of the Strait of Hormuz. This inevitably brings into play a shipowner or carrier’s right to refuse orders, detour, discharge cargo at any safe port and impose surcharges due to war risks.

Many industry panels and client briefings on war risks have mainly focused on two acronyms: VOYWAR and CONWARTIME, BIMCO’s standard war risk clauses for voyage and time charters. In these same discussions, another type of clause is often mentioned in passing or in the same breath (and sometimes treated as interchangeable): the hindrance clause found in the standard terms of a bill of lading.

While all these clauses essentially address the same problem – a vessel unable to safely reach its designated destination – it is important to appreciate that VOYWAR/CONWARTIME and bill of lading hindrance clauses do not wear the same hats.

What are these two clauses, really?

The bill of lading hindrance clause is in the contract of carriage between the carrier and cargo interest (shipper or consignee). Since bills of lading are often subject to the Hague-Visby Rules, a failure to deliver cargo to the discharge port or an unauthorised deviation from the contractual route would ordinarily constitute a breach of the contract of carriage.[1]

Therefore, hindrance clauses are often incorporated into the bill of lading to grant the carrier discretion to determine whether the continuation of the contractual voyage would expose the vessel, cargo, or crew to war, danger or other risks, and, where appropriate, to deviate from the agreed route, suspend or terminate the voyage, or discharge the cargo at an alternative port.VOYWAR/CONWARTIME, on the other hand, is a charterparty term. Its function is to allocate the risks and responsibilities between shipowners and charterers when a vessel passes through areas exposed to war risks.

Different Spheres, Different Effects

Essentially, these clauses operate in different contractual spheres, bind different parties, and are triggered via different mechanisms.

Parties
The bill of lading hindrance clause applies to and protects the carrier from any claims by the shipper or consignee. By contrast, VOYWAR/CONWARTIME applies between owners and charterers. Whether VOYWAR/CONWARTIME would apply between owners/charterers and shippers/consignees depends on whether the clause has been incorporated into the bill of lading and whether the clause is directly relevant to the shipment, carriage or delivery of the cargo.[2] 

Effect
These clauses also have different effects and applications.

Shipowners who successfully rely on VOYWAR/CONWARTIME are entitled to refuse to proceed to or continue through an area where the vessel is deemed to be exposed to war risks, without incurring liability for breach, delay or deviation, even if they knowingly agreed to a charterparty during an ongoing conflict.

VOYWAR/CONWARTIME also applies a “reasonable judgement” test which was refined after The Triton Lark [2011] EWHC 2862 (Comm) into a test of whether there is a real likelihood or serious possibility that the vessel will be exposed to war risks, rather than a merely remote or speculative risk.[3]

Furthermore, shipowners are entitled to recover from the charterer any additional war risk insurance premiums or costs incurred as a result. This is especially important in recent times given the sharp increase in war risk premiums for vessels passing through the Gulf in March 2026.[4]

On the other hand, most hindrance clauses in bills of lading (such as the P&O Nedlloyd Bill) can apply to any situation (including war risks) where the Carriage is (or likely is) affected by any “hindrance, risk, delay, difficulty or disadvantage of any kind”, depending on how the specific clauses are worded.

These bill of lading hindrance clauses also allow carriers to either: (a) complete the voyage via the intended or an alternative route while recovering any additional freight, including war risk charges, (b) suspend the carriage and store the cargo pending onward shipment, with entitlement to additional freight, or (c) abandon the carriage by placing the cargo at the merchant’s disposal at a safe and convenient port, whereupon the carrier’s responsibility ceases while its entitlement to full freight and reimbursement of additional costs is preserved.

Thus, VOYWAR/CONWARTIME provides shipowners with the operational flexibility, commercial protection, and cost-allocation mechanisms required during a conflict, while hindrance clauses are defensive, essentially shielding carriers from a claim.

That being said, these clauses are not entirely unrelated. The BIMCO clauses also contain an indemnity requiring the charterer to cover the owner for any bill of lading claim arising out of the shipowner’s lawful exercise of its war risk rights.

What about Force Majeure clauses?

Neither the hindrance clause in the bill of lading nor the BIMCO war risk clauses are force majeure clauses.

A force majeure clause generally excuses a party from fulfilling its contractual obligation when an extraordinary, unforeseeable event renders performance impossible. The clauses discussed here have a much narrower function: they give one party the contractual liberty to act (refuse, divert or discharge) before the point of impossibility.

Although these clauses may sometimes overlap in scope or effect, they are still contractually different, and it should not be assumed that one clause can be invoked interchangeably with another.

Conclusion

Due to the latest closure of the Strait of Hormuz and continuing uncertainty, these clauses remain a “hot topic”. Thus, it is apposite to be reminded of the differences between these clauses and to consider which clause applies to a particular situation rather than assuming that a right secured at the charterparty level would automatically apply to a bill of lading and vice versa.

We wish to thank our Intern, Jonah Boo, for his contributions to this article.

 

Prepared By: 

K.Murali Pany

Senior Partner

JTJB LLP

E: murali@jtjb.com

T: 6224 3645

[1] Hague-Visby Rules, Art IV r.4, read with the common law doctrine of deviation

[2] Herculito Maritime Ltd v Gunvor International BV [2024] UKSC 2 (‘The Polar’)

[3] Pacific Basin IHX ltd v Bulkhandling Handymax AS (No.1) [2011] EWHC 2862 (Comm) (‘The Triton Lark’)

[4]https://www.lloydslist.com/LL1156586/Gulf-war-risk-premiums-topping-double-digit-millions-of-dollars-per-trip

 

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